News of a phone call between U.S. President Donald Trump and Chinese President Xi Jinping raised hopes of an easing in U.S.-China trade tensions.
Investor sentiment was given a further shot in the arm on Friday after Bloomberg reported that Trump had asked U.S. officials to begin drafting a possible trade deal with China.
Against the safe haven yen, the dollar was up 0.3 percent at 113.03 yen, paring the previous day’s losses.
The Australian dollar climbed 0.5 percent to $0.7242, stretching its rally from the previous day.
The dollar index had risen to 97.00 on Wednesday, its highest since February 2017, lifted by upbeat U.S. data and a corresponding rise in Treasury yields.
The dollar index was little changed at 96.321 after dropping nearly 0.9 percent overnight, weighed by a rallying sterling.
The pound stood tall after the Bank of England kept interest rates steady on Thursday and hinted at slightly faster future rate rises if Brexit goes smoothly.
Sterling was steady at $1.2998 and retained the bulk of its gains after surging 1.8 percent on Thursday, its biggest one-day gain since April 2017.
The euro inched up 0.05 percent to $1.1414 after gaining 0.9 percent overnight on the dollar’s retreat. The single currency had stooped to a 2-1/2-month trough of $1.1302 on Wednesday.
China’s yuan rose about 0.2 percent to a three-week high of 6.8970 in offshore trade after gaining 0.8 percent on Thursday.
Worries about Chinese economic growth and the trade row had pushed the offshore yuan to a 22-month trough of 6.9800 midweek.
· U.S. job growth likely rebounded in October, with wages expected to have recorded their largest annual gain in 9-1/2 years, pointing to further labor market tightening that could encourage the Federal Reserve to raise interest rates again in December.
The Labor Department’s closely watched monthly employment report on Friday is also expected to show the unemployment rate steady at a 49-year low of 3.7 percent. Sustained labor market strength could ease fears about the economy’s health following weak housing data and stalling business spending.
Nonfarm payrolls probably increased by 190,000 jobs last month, according to a Reuters survey of economists. Payrolls rose by 134,000 jobs in September, the smallest gain in a year, after Hurricane Florence drenched North and South Carolina, weighing on restaurant and retail employment.
Average hourly earnings are forecast rising 0.2 percent in October after advancing 0.3 percent in September. This would boost the annual increase in the wages to 3.1 percent, the biggest gain since April 2009, from 2.8percent in September.
· Fed Funds Futures are pricing in a 70.8% chance of a rate hike this December, this is down from about 80% certainty back in mid October
· U.S. President Donald Trump has offered to host a dinner for Chinese President Xi Jinping on December 1 in Buenos Aires after the G20 leaders summit, an invitation China has tentatively accepted, South China Morning Post reports
US President Donald Trump: China's Xi wants to make a fair trade deal, 'we have to make a right deal'
· Bloomberg reported that Trump is interested in reaching a trade agreement with his Chinese counterpart Xi Jinping at the Group of 20 nations summit in Argentina later this month and has asked key U.S. officials to begin drafting potential terms, citing people familiar with the matter.
One person said a sticking point in any potential deal is intellectual property theft, where the Trump administration has sought to take a hard line, and it was unclear if Trump was easing up on U.S. demands that China has resisted.
· China’s foreign ministry said on Friday that the previous day’s telephone call between Chinese President Xi Jinping and U.S. President Donald Trump was quite positive.
· Prime Minister Shinzo Abe’s cabinet approved draft legislation on Friday to open the door to more overseas blue-collar workers in sectors grappling with labor shortages, a controversial policy shift in immigration-shy Japan.
Japan’s prime minister on Friday warned against forcing through a proposed sales tax hike next year if economic conditions worsened, a sign he was open to postponing the increase for a third time if circumstances required it.
· PBOC strengthens Yuan fixing rate by 0.43%, most since August 28th to 6.9371/USD
· Germany’s economy likely shrunk by around 0.3 percent in the third quarter, the IfW institute said on Friday, adding this was probably largely caused by declines in production in the auto industry due to the introduction of new pollution standards known as WLTP.
Stefan Kooths, head of the forecasting center at the Cologne-based Institute for Economic Research (IfW), said growth in Europe’s largest economy was likely to pick up significantly again in the fourth quarter.
· Oil prices reversed earlier losses on Friday as hopes rose that the United States and China may resolve their trade disputes soon, easing concerns that an economic slowdown may weigh on fuel demand.
Front-month Brent crude futures were at $73.04 per barrel at 0520 GMT on Friday, up 15 cents, or 0.2 percent, from their last close.
U.S. West Texas Intermediate (WTI) crude futures were up 7 cents, or 0.1 percent, at $63.76 a barrel.
· Crude Oil WTI Technical Analysis: Black Gold collapsing near $63.00 a barrel and to levels not seen since June
Crude oil is trading in a bear trend below the 200-period simple moving average (SMA).
Crude oil is having a strong selloff this Thursday as WTI almost reached the 63.00 level.
The bias is bearish and targets to the downside can be seen near 63.00 figure and 61.81 April 6 low.
Main Trend: Bearish
Resistance: 64.00, 64.40, 65.00
Support: 63.59, 63.00, 61.81
Reference: Reuters, CNBC, FX Street
Thai
Eng